The north China city of Tianjin achieved its biggest overseas financing for city construction in the Hong Kong market, suggesting global investors are still interested in Chinese local bonds despite an economic slowdown.
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Tianjin Binhai New Area Construction and Investment Group, a financing vehicle of the Tianjin government, said on Tuesday that it raised 800 million USD in the bond market with an interest rate of 3.55 percent.
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The borrowing included 300 million USD in three-year bonds and 500 million USD in five-year bonds.
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It was the largest overseas financing for Tianjin local government financing vehicles (LGFVs), according to Tianjin Binhai New Area Construction and Investment Group.
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As China reined in local government debt, LGFVs started to exchange their bank loans for bonds with much lower interest rates and tapped the international market for money.
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Tianjin Binhai New Area Construction and Investment Group set up a company in Hong Kong last December to facilitate overseas financing.
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Earlier this month, China opened its interbank bond market to foreign central banks, international financial institutions and sovereign wealth funds, a move Fitch Ratings said would boost demand for Chinese local government bonds.Â